This is an eye opener on multiple sources to access to accessing funds for business start-up and expansion in Nigeria.

1. BUSINESS BUILDERS
LIMITED
PRESENTS
WAYS TO RAISE CAPITAL
FOR YOUR BUSINESS

2. OVERVIEW
For many young entrepreneurs with start-up
businesses, one of the most difficult obstacles
they encounter is raising money. Coming up with
capital for your business may be relatively easy
,but getting more funds to finance the continued
growth of your business will be a lot harder

3. Raising Money: What You
Need
There are many factors to consider when raising
money in business, and it’s never an easy task. If you
ask any entrepreneur or company founder –
especially those who own start-up or small
companies – big investors lining up at your
company’s doorstep to invest is something they’d all
want to happen. However, that’s not how it is in
reality. Young entrepreneurs will have to rely on their
own skills and knowledge to raise the money they
need to support their businesses.

4. SOURCES OF LOAN
B ANK LOAN
This Will Be Helpful To Small Business
Owners Who Have Little Or No
Experience With Borrowing And Who
Do Not Know The Best Way To
Approach A Bank For Credit Facilities.

5. Types of Bank Loan
There are different types of loans offered by
banks and the first step for a serious
entrepreneur is to know the right one for her
business. Depending on your needs and the
type of business you want to start, there are
basically two main types of small business
loans: overdrafts and term loans. Let’s look
at what they are and how one is different from
the other…

6. An overdraft is a type of loan that allows you to
withdraw money from your bank account even if you
have little or no money in it. So, if your bank
approves an overdraft of #50,000 for your business, it
means you will have access to this money even if
your account balance is zero. Overdrafts are usually
short term and last for about six months to one year
before they are renewed. As a result, they should
only be used as working capital for business activities
that are short term in nature such as paying staff
salaries or purchasing goods to be supplied to a
customer.
OVERDRAFT

7. ADVANTAGES
One of the benefits of a bank overdraft is its flexibility.
You only pay interest on the amount of the overdraft
you use; if you don’t use it, no interest is paid (except
for some bank charges that may apply). However, its
disadvantage is that it is only available to solve short
term capital needs. Never use a bank overdraft to
purchase equipment or lease a property which has a
longer term than the overdraft itself. Using a (six-
month) bank overdraft to pay for a two-year office
lease is trouble.

8. Get Advance Funding from
Customers.
This is one of the few ways of starting or
running a business with zero capital.
Customers with an urgent or desperate need
for a product or service are often willing to
pay the full price (or part of it) in advance.
This ‘upfront’ payment usually provides you
with the capital you need to produce the
product or service, get it delivered to the
customer and turn a nice profit.

9. ENTER FOR A 'BUSINESS PLAN' OR
'ENTREPRENEURSHIP' COMPETITION
You would be amazed at the number of business
plan competitions that are available every year for
African entrepreneurs and small business startups.
Many of us don’t even know about them. All kinds of
local and international organizations put these
competitions together to encourage and boost small
and medium scale businesses on our continent.
Governments, foundations, the United Nations are
just a few of the big names behind some of these
contests. E.g YOU WIN

10. PARTNER WITH WHO HAS
THE CASH
Most times, having a great idea isn’t all it takes to
start a business. You may have the technical skills or
brain power to build an amazing product but you still
need a partner who has money that you need to
make the product and sell it to the market. When you
have a profitable business idea and find a partner
who can contribute the capital, both of you bring
something to the table and can share ownership of
the business. It’s a win-win situation for both of you!

11. NATIONAL DIRECTORATE
OF EMPLOYMENT (NDE)
Those who require loans without
security, applications should be made to
the NDE. The directorate caters for
unemployed graduates, school leaver
and other able-bodied unemployed
people. Contact your state office of the
NDE for detailed information.

12. CO-OPERATIVE SOCIETIES
It is one of the effective and reliable
sources of capital for your self-
employment business.
Its advantages are:
1. Low interest rate
2. No collateral
3. Loans are payable for a period of ten
months or more.

13. Business Angels
Another source of raising money for
business is to source funds from high
net-worth individuals. These are
business angels with substantial idle
funds. The only challenge is getting
someone they trust to introduce you to
them and getting them listen to your
business proposal.

14. ANGELS COME IN TWO VARIETIES: Those
you know and those you don't know. They
may include professionals such as doctors
and lawyers; business associates such as
executives, suppliers and customers; and
even other entrepreneurs. Unlike venture
capitalists and bankers, many angels are not
motivated solely by profit. Particularly if your
angel is a current or former entrepreneur, he
or she may be motivated as much by the
enjoyment of helping a young business
succeed as by the money he or she stands to
gain. Angels are more likely than venture capitalists
to be persuaded by an entrepreneur's drive to
succeed, persistence and mental discipline.

15. Federal Development Banks
Bank of industry(BOI)
Nigeria Bank for commerce And
Industry(N.B.C.I.)
Nigeria Agricultural Co-operative And Rural
Development Bank(N.A.C.R.D.B.)
Federal Mortgage Bank
Merchant Banks
Nigeria Export/Import bank (NEXIM)

16. INTERNATIONAL AGENCIES
International Finance Corporation (IFC)
International Bank For Research And
Development (IBRD)
IBRD is giving out NERFUN/SME loans for the
development of small/medium enterprises
through local participating banks

17. MICRO-FINANCE
INSTITUTIONS(MFIs)
These are institutions that provide credit
facilities to groups or person that cannot
be assisted by banks. MFIs funds are
obtained from international donors, non-
governmental agencies, multi-nationals
and public sectors.

18. State Government Investment
Corporations
In Nigeria, a good number of state government
have established finance for agriculture, small
and medium scale industry and housing. Some of
the corporations provide both loan and equity
finance for mall and medium scale industry and
housing.

19. NATIONAL ECONOMIC
RECONSTRUCTION FUND
(NERFUND)
Obtaining funding from NERFUND is a very
serious business.
Your first port of call for NERFUND loan
application is your local bank, which will
accept and process your application for the
bank’ consideration.

20. Personal Savings
You cannot achieve much in life without
personal savings.
A good saver of money will have at his or her
disposal capital that can be invested in any
chosen self employment business.
It is really not how much you save that
matters but the fact that you develop your
saving habit

21. Credit facilities
Credit facilities are obtainable for
either raw materials or wholesale
goods for retail. Generally trade
credit is credit extended by
suppliers. You may need some
references to be considered credit
worthy.

22. LIFE INSURANCE POLICY AND
INSURANCE COMPANIES
Life Insurance Policy: this is a form of
compulsory saving in a specific period of time
towards a project or plan.
Insurance Companies: they are major source of
finance for industry directly or indirectly through
the banks. Here are a list of some strong and
reliable ones:
a. Nigeria Agricultural Insurance Corporation.
b. Niger Insurance.
c. Standard Alliance Insurance.

23. Assets Finance
The most popular method of financing
machines and equipment needed in
business is via hire purchase and
leasing. The asset finance companies of
Nigeria have developed a number of
ways of assisting small and medium
sized business owners and start-up
entrepreneurs.

24. Finance Houses
Finance houses are privately owned
investments companies which give
assistance to companies which are
unable to finance the purchase of
assets through borrowing, by hire
purchase or a leasing arrangement.
Apart from providing finance, they assist
companies in capital restructuring or
project financing.

25. Other People’s Money
This is another possible source of
capital to finance your business. You
will have to convince the owners that
the money will be judiciously invested
and also enter into some sort of
agreement.

26. Partnership
If you need business fund on medium or long
term basis then you could consider entering
into partnership with people of like minds who
may decide to take some active part in
managing the business with you.
This is a sort of strategic alliance and the
operative phrase is to partner with people of
like minds.
You may also consider merging with another
company that have what you do not have.

27. Gratuity

28. FOR MORE INFORMATION ON HOW
TO RAISE CAPITAL FOR YOUR
BUSINESS
CONTACT BUSINESS BUILDERS
NETWORK
Delivered by Mr. Emmanuel Excel Ogbeide,
CEO Business Builders Limited
103 BODE THOMAS SURULERE LAGOS │ (+234) (0)
8103685995 │ excelogbeide@yahoo.com
│www.businessbuilders.com